New York – Approval of 2014 Health Insurance Exchange Rates
2014 Health Insurance Benefit Exchange Rates – NY
Governor Cuomo distributed a press release July 17th announcing the approval of the 2014 Health Insurance Plan Rates for the Health Benefit Exchange. At first glance it may seem promising, but with closer inspection and some number crunching, what is not mentioned is just as important as what is.
The press release offers the following:
“On average, the approved 2014 rates for even the highest tier of plans individual New York consumers could purchase on the exchange (gold and platinum) represent a 53 percent reduction compared to last year’s direct-pay individual rates.”
These rates do appear to represent a substantial savings. However, the rates do not necessarily mean healthcare will be affordable to the majority of individuals. Currently, the direct-pay individual products are so expensive that even reducing them by 53% would not make them affordable for most New Yorkers.
The chart below outlines Oxford’s current direct-pay individual rates compared to the approximate rates they would be reduced to, on a monthly basis based on Governor Cuomo’s press release. The approximate rates were calculated by multiplying the current direct pay rates by 47%.
Oxford Current Direct Pay Monthly Rates
Approximate (Platinum/Gold) Health Benefit Exchange Monthly Rates
As shown, even the reduced rates prove to be costly. Furthermore, subsidies or discounts will only be available to individuals who fall within 400% of the poverty level. The options for the remainder of individuals will be to:
a. Pay the premiums stated above
b. Obtain coverage through an employer, or
c. Pay a tax for not having health insurance
For instance, a family of 4 who is at 403% of the poverty level (making household income of $95,000/year) would not be eligible for a subsidy. They would therefore be responsible for their entire premium which could be as high as $26,146.32 per year as illustrated above. Less expensive “Bronze” plans will be available, but we do not yet know what their costs will be.
A major benefit to note is that additional insurance carriers will be entering the market which will offer more choices for small businesses shopping for group health insurance. This is likely to drive competition for market share and thus motivate carriers to offer more efficient plans. Currently, the small group market is limited to a choice of Oxford, Emblem, Aetna, or EasyChoice. HIP has mostly exited the market, as well as Empire BCBS. Beginning in 2014, individuals, businesses, and health insurance brokers will have access to any one of the following carriers:
• Affinity Health Plan, Inc.
• American Progressive Life & Health Insurance Company of New York
• Capital District Physicians Health Plan, Inc.
• Health Insurance Plan of Greater New York
• Empire BlueCross BlueShield
• Fidelis Care
• Freelancers Co-Op
• Healthfirst New York
• HealthNow New York, Inc.
• Independent Health
• MetroPlus Health Plan
• MVP Health Plan, Inc.
• North Shore LIJ
• Oscar Health Insurance Co.
• United Healthcare
Overall, the new health exchange demonstrates an improvement to the existing rates for individuals and is a step in the right direction. However, it is important to understand that it is only a step. There are still great strides to be made in this arena. Even with the health exchange, rates may remain out of reach for many New Yorkers looking to buy insurance outside of their employer.
Governor Cuomo’s original press release can be found here